A key House lawmaker said Monday that he favors waiving fiscal rules to deal with two controversial healthcare issues. The move would add hundreds of billions of dollars to the deficit.

During a press conference, Rep. Pete Stark (D-Calif.) said passing healthcare reform and averting a massive cut in Medicare doctor payments cannot realistically be done unless Congress waives its so-called pay-as-you-go rules (PAYGO).

To deal comprehensively with forthcoming cuts in Medicare payments for physicians, Stark said the price tag would be in the range of $200 billion to $300 billion. The lawmaker added that he has talked with lawmakers in the Blue Dog Coalition, a group of conservative House Democrats who strongly support PAYGO.

But some Blue Dogs are likely to balk at making more exceptions to PAYGO, which was waived on the alternative minimum tax, economic stimulus and recent financial rescue plan. Democratic leaders in Congress adopted PAYGO rules in 2007, touting their commitment to fiscal responsibility.

Some Democrats want to ease PAYGO rules in order to help pass their ambitious 2009 agenda.

The physician payment issue is especially thorny because the Bush administration and Congress have been dealing with the cuts on a piecemeal approach, averting the payment reductions with a short-term approach every year or so for the past decade.

Stark and Democratic staff have stressed that Congress is in a bind on the matter, proposing that the complicated Medicare formula be scrapped and a new budget-neutral system be put in place.

“I don’t know another answer to how to do it,” Stark said.

Stark said he has made the case to some Blue Dogs on the Ways and Means, and Budget, committees that the Medicare payment dilemma is unique and warrants an exception to PAYGO rules.

Asked how Congress will pay for comprehensive healthcare reform in the 111th Congress, Stark noted that lawmakers waived PAYGO for the Wall Street bailout and didn’t offset costs for the war in Iraq. He claimed that lawmakers shouldn’t have to abide by PAYGO to pass healthcare reform, questioning why offsets are necessary to address the nation’s uninsured problem.

The California lawmaker said he does not object to President-elect Barack Obama’s plan to raise taxes on people making $250,000 or more to help finance a new health system for the country.

It is unclear how much money will be needed for healthcare reform. Stark said congressional leaders will wait until they receive Obama’s formal proposal, adding that he hopes the president-elect will allow the legislative branch some flexibility to shape the bill.

Stark said he will hold hearings on healthcare reform, anticipating that the legislation will go through the committee process before it reaches the floor. That statement, coupled with Stark’s vow to tackle the State Children’s Health Insurance Program (SCHIP) first, suggests major healthcare reform will not be passed in the first couple of months of the new Congress.

Stark provided the media with a summary of his universal healthcare bill, the AmeriCare Health Care Act (H.R. 1841). The measure, which has 32 cosponsors, is different than Obama’s plan but would build upon aspects of the existing employer-based model — as does the president-elect’s.

Yet, Stark’s bill calls for universal coverage through the expansion of Medicare. Obama’s plan has been criticized by some liberals for not having a larger government role and for not covering all Americans.

Congress may deal with SCHIP in a lame-duck session next week, Stark said. But he doubts that the administration will agree to compromise on an economic stimulus, causing all legislative activity to be pushed until next year, including SCHIP. Stark said he has not talked with Speaker Nancy Pelosi (D-Calif.) about the possibility of scrapping the lame-duck session.

Bush has previously vetoed SCHIP legislation, though it is possible Congress could have the votes in November to override him. Some Democrats believe SCHIP should be one of the first bills Obama signs into law.

Stark, who was a key figure in the 1993 healthcare reform talks, said he is more optimistic this time around because employer groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers are more receptive to enacting healthcare reform than they were 15 years ago.

The two main House committees that will deal with healthcare next year are Ways and Means and Energy and Commerce.

Asked whether he backs Rep. Henry Waxman (D-Calif.) or John Dingell (D-Mich.) to head the Energy and Commerce panel, Stark said he backs whoever is most in line with his “theories,” without naming a favorite.

Told that Waxman has cosponsored his healthcare bill and Dingell has not, Stark smiled and told The Hill, “I bet [Dingell] will.”

Pressed on his own future, Stark said he would run to replace Rep. Charles Rangel as chairman of the Ways and Means Committee should the New York Democrat decide to step down. But he doesn’t expect Rangel to retire any time soon.

Asked if he thought he would be challenged for the top spot on Ways and Means, Stark said, “I don’t know — depends on the circumstances.”

The House ethics committee is reviewing some of Rangel’s business dealings, which have attracted widespread media attention.